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Lost chance gets a chance in Illinois legal malpractice case
12/27/24
Illinois Appellate Court, First District in PBKM, LLC v. Kutak Rock, LLP, 2024 IL App (1st) 230033 is the first court nationally to adopt the lost chance doctrine in a legal malpractice context. The court reversed the dismissal entered by the circuit court and allowed a legal malpractice claim to proceed. The court limited its holding to the narrow and unique facts where the alleged lost chance to participate in a cannabis dispensary lottery was calculable to a mathematical certainty.
The plaintiffs, including PBKM LLC and two of its proposed dispensary subsidiaries, alleged that the law firm negligently structured their companies, resulting in noncompliance with the social equity ownership and control requirements mandated by the Cannabis Regulation and Tax Act. Consequently, two of the ten dispensary applications were denied, preventing those companies from participating in the state’s dispensary license lottery.
The trial court dismissed the case, reasoning that the corporate structure set up by the law firm did not breach the legal requirements and that the plaintiffs’ claimed damages, based on their lost chance to win the license lottery, were speculative. However, the appellate court reversed the dismissal of the legal malpractice claim. The court determined that the corporate structure may not have complied with the social equity rules and held that Illinois law should recognize a claim for a mathematically calculable “lost chance” of participation in the lottery. The decision emphasized the unique nature of this case, where the lost opportunity could be quantified with certainty due to the lottery format. This is an expansion of the doctrine beyond the medical malpractice realm where the lost chance doctrine is permissible because of the reasonable degree of certainty that modern medicine can calculate the loss of a chance for a patient’s recovery following alleged malpractice where an adverse outcome was more likely than not.
The appellate court affirmed the dismissal of other claims, including breach of fiduciary duty and claims against additional defendants, finding them duplicative or unsupported by law. The case was remanded for further proceedings on the legal malpractice claim, particularly the application of the lost chance doctrine to the plaintiffs’ damages.
Though this case presented unique facts that are not likely to be repeated or applicable in other contexts, the decision demonstrates that courts will look for a remedy for alleged negligence.
For more information, please contact Donald Patrick Eckler at patrick.eckler@fmglaw.com or your local FMG attorney.
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